- Prices of shiba inu, dogecoin, bitcoin, and tether dropped on a popular crypto exchange in India.
- The declines came as the country mulls a crackdown on private cryptocurrencies.
- The declines created an arbitrage opportunity for savvy investors, but a tough one to capitalize on.
Cryptocurrencies dropped in India Wednesday morning as the country mulled a crackdown on digital assets — and its opened up opportunities for witty investors.
According to a Bloomberg article, shiba inu coin and dogecoin sunk more than 20% on the WazirX crypto exchange in India while on Binance and Kraken, they were relatively unaffected. Bitcoin, for its part, dropped 14% on WazirX and just 0.5% on Binance, the article said. Tether, a stablecoin, also sunk on the exchange while remaining steady elsewhere, Coindesk reported.
A proposed law in India is seeking to ban all private cryptocurrencies, likely causing the price declines on the local exchanges.
The price drops opened up an opportunity for investors to buy the dip and profit elsewhere. According to CoinDesk’s report, arbitrage opportunities in India are mainly helpful for small-time investors because bigger market makers avoid the country for lack of regulatory clarity.
But the trick was figuring out how to transfer funds to a different exchange after purchasing the assets at a lower cost, Bloomberg said. And it’s not easy. WazirX tweeted out that it was experiencing trading delays in the app, and frustrated users responded that they could not move their crypto. Several hours later the company said the problem was fixed.
“We’d like to reiterate that WazirX has an open order book and doesn’t determine or control the price of any crypto on the exchange,” the platform said in a tweet. “There will always be a difference from exchange to exchange, country to country, etc. depending on the demand and supply.”
Crypto arbitrage opportunities have been well documented, as the prices can vary between exchanges. A 2017 Insider article noted the issue stems from the market being “diffused, unregulated, and disjointed.”